An Affordable BeltLine?

If You Say You’ll Build It, They Will Come

Projects like the BeltLine often produce increased transportation options, higher density development, and an array of amenities that enhance nearby neighborhoods. Often, they catalyze significant, positive change for all neighborhoods in the vicinity. However, the effects on lower income neighborhoods suffering from disinvestment are often magnified and rapid, with unintended effects on original residents.

Pittsburgh and West End on the south side of the BeltLine are low-income neighborhoods located about two miles southwest of downtown Atlanta. Prior to the conception of the BeltLine, these neighborhoods suffered from significant disinvestment and exhibited much lower home prices than most other neighborhoods in the city. In 2000, the median price for single-family home sales in Pittsburgh, the West End, and the neighborhoods immediately surrounding them—an area designated as Neighborhood Planning Unit V, or NPU V (Atlanta is broken down into 25 of these units, AÐZ, in order to coordinate planning and political activities)—was $56,000, compared to the citywide median price of $96,000.

But when news of the BeltLine concept started to crop up in late 2002, property values in NPU V began to rise rapidly relative to other neighborhoods in the city. By 2003, the median sale price had climbed from $56,000 to $140,000—a 150 percent increase in three years. Citywide, prices had only increased about 56 percent. The BeltLine was still only a concept—not a single shovel had gone into the ground.

Speculative investors flooded into these neighborhoods and snatched up cheap, often dilapidated, properties. In many cases, they turned around and resold the properties at significantly higher prices, with buyers anticipating added value from the transit improvements and amenities expected several years down the line. This speculation drove prices out of the range of affordability for many of the long-time residents in Pittsburgh, the West End, and many surrounding neighborhoods.

Prices in neighborhoods on the south side of the BeltLine continued to rise significantly from 2003 through the approval of the BeltLine TAD in late 2005. By 2006, the median home sale price in the NPU V was $205,000. Dan Immergluck, an associate professor at the Georgia Institute of Technology in Atlanta, conducted a comprehensive study of the change in home prices in neighborhoods in and around the BeltLine TAD from 2000 to 2006. He found that NPU V had experienced greater home price increases over the six-year period than any other NPU—the median home price there had increased over 266 percent, an annual average increase of over 24 percent.

Immergluck also found that the BeltLine had a distinct effect on prices beyond the general gentrification trends that had been occurring in certain low-income neighborhoods in Atlanta for some years. His study showed that between 2001 and 2006, homes located within one-eighth of a mile of the TAD experienced a median price increase of 68 percent, compared to a 32 percent increase for homes located between one and one-and-a-half miles of the TAD. The escalating home prices in the neighborhoods in or near the TAD were accompanied by a substantial influx of upper-income buyers—another warning sign that the neighborhoods may continue to become less affordable in the future.

As developers struggle to find buyers for rehabbed affordable homes, many are looking to a lease-purchase model to expand the pool of potential owners. But lease-purchase is far more complicated than just an end-run around the credit crunch.

HUD Deputy Secretary Ron Sims doesn’t just want the 8,500 employees he oversees at the U.S. Department of Housing and Urban Development to do their jobs: he wants them to challenge themselves, even if there’s a risk of failure.